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80Urban crime and violenceTable 3.6Impact of the WorldTrade Center attack onNew York City as ofJune 2002Source: Bram et al, 2002, p12Impact Estimated magnitude NotesLabour marketLoss of human life Estimated 2780 workers, Losses estimated as present discounted value of lifetime earnings;US$7.8 billion lifetime-earnings lossfederal Victim Compensation Fund set up to help offset earningslosses and psychological impacts on familiesNet job losses 38,000–46,000 in October 2001, rising to Most of the employment losses related to the attack were in49,000–71,000 by February 2002, diminishing to 28,000–55,000 finance, airlines, hotels and restaurantsby June 2002Net earnings losses US$3.6 billion to US$6.4 billion between September 2001 Based on estimates of net job losses and reduced hoursand June 2002Attack-related productivity effects Some increase in post-traumatic stress disorder and alcohol Difficult to quantify attack’s impact on workers’ mental andand drug use three months after attackphysical disabilitiesTotal labour lossUS$11.4–14.2 billionPhysical capitalCleanup and site restoration US$1.5 billion Completed June 2002; expenses covered by the Federal EmergencyManagement Agency (FEMA)Destroyed buildings in Approximately 14 million square feet, Book value of towers at $3.5 billion; complex privately insuredWorld Trade Center complex US$6.7 billion to rebuild Inclusion of damage to Class B and C space raises estimate to 21Damaged buildings in Approximately 15 million square feet, US$4.5 billion million square feetWorld Trade Center areaContents of buildings in US$5.2 billion Significant offset from private insuranceWorld Trade Center complexPublic infrastructureSubway US$850 million Estimated repair cost; significant offset from private insurancePATH train station US$550 million and/or FEMA for repair to all three components of infrastructureUtilitiesUS$2.3 billionTotal capital lossUS$21.6 billionTotal (labour, capital) lossUS$33–36 billionNotes: The rounding of the total (labour and capital) loss figure acknowledges imprecision in the estimates. On the one hand, estimates of the labour loss may be understated, primarilyfor two reasons: the June 2002 cutoff for estimating earnings impacts and the possible earnings reductions due to a drop in the number of hours worked (in industries other thanapparel and restaurants). In addition, attack-related declines in worker productivity (due, for example, to stress) may have affected employed workers and are not captured in ourestimated earnings losses associated with declines in employment and hours. On the other hand, estimates of the labour loss may be overstated, because of the double counting ofthe earnings losses of some of the deceased workers and the assumption that the deceased workers would have worked in New York City until retirement. Furthermore, althoughthis earnings-loss tally corresponds to New York City proper, these figures will overstate the net impact on the broader metropolitan area and the nation because many of the job‘losses’ reflect job relocations from the city to the suburbs – largely northern New Jersey. Because these are aggregate loss estimates, the issue of distributional impacts is notaddressed.Terrorist attackshave resulted innew and tightenedsecurity measureson publictransportationsystems in citiesacross the worldestimated magnitude of the loss of physical capital and infrastructure,including the cost of cleanup and restoration, wasUS$26.1 billion. A significant proportion of the cost ofdestruction and damage has been offset by private insurance,while the Federal Emergency Management Agencycovered the cost of cleanup and restoration. All these havecontributed to reducing the long-term effects of the destructionof physical capital and infrastructure on New York City.The impacts of terrorist attacks on physical infrastructurein cities of developing countries are equally devastatingand the long-term effects are likely to be more pronounced,given the inadequate condition of such infrastructure in thefirst place. For example, it has been observed that the effectsof the various violent assaults on Baghdad’s infrastructurehave been to reduce what was once a fairly advancedeconomy to ‘pre-industrial age’. 254 Furthermore, the poorstate of the economy of many developing countries and theabsence of indemnity to cover the cost of destruction onsuch a massive scale imply that recovery from severe terroristattacks is likely to be very difficult, if not impossible.The loss of urban employment on account of terroristattacks is more documented in the case of developedcountries, particularly in the aftermath of 9/11. Sources oflivelihood have also been lost in cities of developingcountries following terrorist attacks, and their effects arelikely to be exacerbated, given the relatively low levels offormal sector employment. The events of 9/11 have had adisruptive effect on employment in New York City. In particular,Table 3.6 shows that the number of private sector joblosses varied between 38,000 and 46,000 in October 2001,and had increased to between 49,000 and 71,000 byFebruary 2002. These job losses varied across industries, asindicated in Box 3.6, with the most affected being financialservices, restaurant, hotel, and air transportation. Otherindustries that were affected include business services,apparel manufacturing, printing and publishing – due totheir strong concentration in Lower Manhattan.Terrorist attacks have resulted in new and tightenedsecurity measures on public transportation systems in citiesacross the world. With respect to air transport in the US,some of these measures include: 255• About 5000 members of the US National Guard,dressed in camouflage and with M-16 rifles in hand,deployed to some 422 airports around the country.• More (private) security personnel deployed at airports.• Allowing only ticketed passengers in the departure gateareas.• Better screening of passengers at airport checkpoints,for knives, cutting instruments, guns and otherweapons.• More random checks of passengers, their shoes andtheir carry-on luggage.• X-raying of carry-on lap-top computers and otherbaggage.• More detailed background checks on all aviation